Cast your memory back to January of last year. It was an innocent time, before “Harambe” or “Ken Bone” meant anything to anyone. Before the possibility of a Donald Trump presidency had set in. Before Crying Jordan became our only means of expressing emotion.
But it was hardly an innocent time for Wall Street. Banks were adrift. Trading revenue was moribund. Hillary Clinton was going to win the presidency, create a special agency devoted to pestering bankers, and put Elizabeth Warren at the helm. Wells Fargo was actually not bad.
Now Wells Fargo is bad, Clinton is lost on the Appalachian Trail, and Wall Street is enjoying a bonanza in the wake of Trump's electoral victory. Earnings reported Friday by JPMorgan and Bank of America both showed strong performance in trading stemming from post-election buying frenzy.
At JPMorgan, bond trading revenue blasted past expectations, rising 31 percent to $3.37 billion in Q4. Bank of America's bond traders “did very well in the first two months of the quarter,” Chief Financial Officer Paul Donofrio said, though they missed expectations (what happened in December?). Overall, BofA beat profit expectations, principally by cutting expenses by 6 percent.
Big banks are back, baby. And all it took was the once-inconceivable election of a cartoon rich guy to the highest office in the land last November. Let's see if Wall Street can make that happen again this quarter.